DUBAI, United Arab Emirates — China is facing a confidence deficit as its economy undergoes massive transition and concern grows over its ongoing property crisis, a top banking CEO said while onstage at Dubai’s World Governments Summit.

“China’s biggest problem to me is a lack of confidence. External investors lack confidence in China and domestic savers lack confidence,” Bill Winters, CEO of emerging markets-focused bank Standard Chartered, told CNBC’s Dan Murphy Monday during a panel discussion.

“But I think China is going through a major transition from old economy to new economy,” Winters added. “If you visit the new economy, which many of you have — I have — it’s booming, absolutely booming, well into double-digit growth rates and in everything EV-related, the whole supply chain, everything sustainable finance and sustainability related, etc.”

Investors are closely watching China, whose stock market gyrations, deflation problem and property woes are casting a shadow over the global growth outlook. According to an International Monetary Fund report completed in late December 2023, demand for new housing in China is set to drop by around 50% over the next decade.

Decreased demand for new housing will make it harder to absorb excess inventory, “prolonging the adjustment into the medium term and weighing on growth,” the report said. Property and related industries account for about 25% of China’s gross domestic product.

IMF Managing Director Kristalina Georgieva, speaking to CNBC in Dubai on Sunday, stressed what she saw as the need for reforms from Beijing in order to stem its economic challenges.

The international lender has discussed with China “longer-term structural issues that the country needs to address,” Georgieva said. “Our analysis shows that without deep structural reforms, growth in China can fall below 4%. And that will be very difficult for the country.”

“We want to see the economy genuinely moving more towards domestic consumption, and less reliance on exports … but for that, [they need] confidence of the consumer,” she said, echoing Winters’ sentiments on domestic confidence. “And that means fix the real estate, get the pension system in place, as well as these longer-term improvements in the fundamentals of the Chinese economy, would be necessary.”

Standard Charters’ Winters, meanwhile, is ultimately optimistic about the world’s second-largest economy, pointing out that every society that’s undergone major economic transition inevitably experiences some level of tumult and growing pains.

“They’re trying to manage this transition without disrupting the financial system, which in the West, we’ve never managed to do,” the CEO said. “Every big industrial transition has had a major depression associated with it, or global financial crisis. They’re trying to avoid that which means it gets dragged out. I think they’ll get through the back end just fine.”

— CNBC’s Evelyn Cheng contributed to this report.

Mortgage demand is struggling to contend with what appears to be another upswing in interest rates. Homebuyers in particular are pulling back.

Total mortgage application volume rose 3.7% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. That was all due to refinancing activity.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) increased to 6.80% from 6.78%, with points decreasing to 0.59 from 0.65 (including the origination fee) for loans with a 20% down payment.

That weekly average does not fully reflect a massive surge in rates last Friday after a much higher-than-expected monthly employment reading from the U.S. Labor Department for January. The average rate on the 30-year fixed surged 29 basis points following the data’s release, according to Mortgage News Daily, and another 12 basis points Monday after a manufacturing report also came in higher than expected. Together, those two jumps made for the third-biggest increase in mortgage rates since March 2020.

Even with rates lower for the bulk of last week, applications for a mortgage to purchase a home fell 1% compared with the previous week and were 19% lower than the same week one year ago.

“Purchase activity has been strong to start 2024 compared to the final quarter of 2023. However, activity is still weaker than a year ago because of low housing supply,” said Joel Kan, an MBA economist, in a release.

Applications to refinance a home loan increased 12% for the week and were 1% higher than a year ago. While the weekly jump may seem like a lot, the base is so low that even a small amount of demand makes for a big weekly percentage change. The refinance share of mortgage activity increased to 35.4% of total applications from 34.2% the previous week.

Mortgage rates fell back slightly on Tuesday, but the move higher was an adjustment to surprisingly strong economic data, according to Matthew Graham, chief operating officer at Mortgage News Daily.

“A slew of Fed speakers has confirmed as much during this time. They’ve been reasonably unified in saying they still expect rate cuts in 2024, but not quite as quickly as the market had been expecting at the beginning of last week,” he added.

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The average rate on the popular 30-year fixed mortgage crossed over 7% on Monday for the first time since December, hitting 7.04%, according to Mortgage News Daily.

It comes after the rate took the sharpest jump in more than a year Friday, after the January employment report came in much higher than expected. Rates then moved up even more Monday after a monthly manufacturing report came in high as well.

Mortgage rates have been on a wild ride since the summer, briefly crossing to a 20-year high of 8% in October. Rates then fell sharply, as investors saw more and more evidence that the Federal Reserve would end its latest phase of interest rate increases.

Mortgage rates do not follow the Fed directly, but they follow loosely the yield on the 10-year Treasury, which is heavily influenced by the central bank’s impression of the economy at any given time.

“The rapid increase in rates over the past two days is actually not too surprising given the fact that the market was widely seen as overly optimistic on the Fed rate cut outlook. The Fed has repeatedly pointed to economic data having the final say in that outlook and data has been shockingly unfriendly to rates as of Friday morning’s jobs report,” said Matthew Graham, chief operating officer at Mortgage News Daily.

As mortgage rates fell over the past two months, buyers seemed to be returning to the market. That coincided with a slight uptick in the number of homes for sale. Total inventory, however, is still historically low and is keeping competition high. It is also keeping home prices stubbornly hot.

High prices and low supply combined to make 2023 the worst for home sales since 1995. Most predict 2024 will be better.

“The strong job market is good news for the spring buying season as higher household incomes are a necessary component, but it also means that mortgage rates are not likely to drop much further at this point,” said Michael Fratantoni, chief economist at the Mortgage Bankers Association.

Mortgage applications to purchase a home had been rising steadily, but fell back in the last few weeks, as mortgage rates edged higher. With the all-important spring housing market closing in, rates are more important than ever, given high and still-rising home prices.

The median price of an existing home sold in December (the most recent data) was $382,600, according to the National Association of Realtors, an increase of 4.4% from December 2022. That was the sixth consecutive month of year-over-year price gains. The median price for the full year was $389,800, a record high.

Given how high prices are, even small rate swings are having an outsized effect on monthly payments, which are the final determination of affordability. Just a half percentage point swing can cost or save a buyer more than $200 a month on the median-priced home. So what next?

“The future of rates in 2024 is all about ifs and thens,” said Graham. “If we see more data like last Friday’s jobs report, rates will have a hard time getting back below 7%. But inflation is even more important than the labor market. If inflation comes in cooler than expected, it could balance the outlook.”

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A group of renters in the U.S. say their landlords are using software to deliver inflated rent hikes.

“We’ve been told as tenants by employees of Equity that the software takes empathy out of the equation. So they can charge whatever the software tells them to charge,” said Kevin Weller, a tenant at Portside Towers since 2021.

Tenants say the management started to increase prices substantially after giving renters concessions during the Covid-19 pandemic.

The 527-unit building is located roughly 20 minutes away from the World Trade Center, on the shoreline of Jersey City, New Jersey. A group of tenants at the tower is involved in a sprawling class-action lawsuit against RealPage and 34 co-defendant landlords. The U.S. Department of Justice filed a statement of interest in the case in December 2023, arguing that the complaints adequately allege violations of the Sherman Antitrust Act.

In November 2023, the attorney general of Washington, D.C., filed a similar but more narrow complaint against RealPage and 14 landlords that collectively manage more than 50,000 apartment units in the District.

“Effectively, RealPage is facilitating a housing cartel,” said Attorney General of the District of Columbia Brian Schwalb in an interview with CNBC. His office filed the complaint on antitrust grounds. They allege that landlords share competitively sensitive data through RealPage, which then sets artificially high rents on a key slice of the local rental market.

“Rather than making independent decisions on what the market here in D.C. calls for in terms of filling vacant units, landlords are compelled, under the terms of their agreement with RealPage, to charge what RealPage tells them,” said Schwalb.

RealPage says its revenue management products use anonymized, aggregated data to deliver pricing recommendations on roughly 4.5 million housing units in the U.S. The company says its tools can increase landlord revenues between 2% and 7%.

“Just turning the system on will outperform your manual analyst. There’s almost no way it can’t,” said Jeffrey Roper, a former RealPage employee and inventor of YieldStar.

YieldStar is one of three key revenue management tools offered by RealPage. The software balances prices, occupancy and lease lengths to help property managers optimize their portfolio’s yield. The company feeds data from its models into a newer tool dubbed “AIRM” that considers the effect of credit, marketing and leasing effectiveness.

RealPage told CNBC that its landlord customers are under no obligation to take their price suggestions. The company also said it charges a fixed fee on each apartment unit managed with its software.

RealPage was acquired by Miami-based private equity firm Thoma Bravo for $10.2 billion in 2021. In court filings, Thoma Bravo has claimed that it is not liable for the alleged acts of its subsidiary outlined by plaintiffs in the class-action complaints.

Renters told CNBC they discovered how revenue management software is used in real estate after reading a 2022 ProPublica investigation. Equity Residential investor materials show that the company started to experiment with Lease Rent Options between 2005 and 2008. RealPage acquired the product in 2017.

“How could we possibly know?” said Harry Gural, a tenant in an Equity Residential property located in the Van Ness neighborhood of Washington, D.C. Gural says he has been involved in legal matters against his landlord’s pricing practices for more than seven years.

Affiliates of Equity Residential are contesting a separate decision made by a local housing authority in Jersey City regarding prices set on the Portside Towers property. The company has filed a lawsuit in federal court challenging the decision, stating that the decision could result in millions of dollars in refunds for tenants.

Equity Residential and other defendant landlords declined to comment on ongoing RealPage litigation.

Redfin reports that asking rents in the U.S. ticked down to $1,964 a month in December 2023, a decline from recent highs. Prices are coming down in markets such as Atlanta and Austin, Texas, where home construction is high. But analysts believe low rates of homebuilding on the U.S. East Coast could give well-located landlords more pricing power.

“Guys like us that own 80,000 well-located apartments, we’re still in a pretty good spot,” said Equity Residential CEO Mark Parrell in a June 2023 interview with CNBC.

Watch the video above to learn about the rising tide of lawsuits against U.S. corporate landlords.

CORRECTION: A previous version of this article misstated when Equity Residential purchased Portside Towers.

China’s financial institutions should provide strong support to the country’s beleaguered real estate sector and not “blindly withdraw” financing for projects facing difficulties, according to a senior Chinese financial regulatory official.

His strongly worded comments follow the Chinese central bank’s largest cut in mandatory cash reserves for banks since 2021. Beijing also recently released a fresh policy mandate aimed at easing the cash crunch for Chinese developers, which have struggled under the crackdown on the sector’s bloated debt.

“The financial industry has an unshirkable responsibility and must provide strong support,” said Xiao Yuanqi, deputy director of China’s National Financial Regulatory Administration, at a press conference in Beijing on Thursday, according to a CNBC translation.

“We all know the real estate industry chain is long and involves a wide range of areas. It has an important impact on the national economy and is closely related to people’s lives,” he added.

China’s real estate troubles are closely intertwined with local government finances since they typically relied on land sales to developers for a significant portion of revenue.

The property market slumped after Beijing cracked down on developers’ high reliance on debt for growth in 2020, weighing on consumer growth and broader growth in the world’s second-largest economy.

“For projects that are in difficulty but whose funds can be balanced, we should not blindly withdraw loans, suppress loans, or cut off loans,” Xiao said. “We should provide greater support through extending existing loans, adjusting repayment arrangements, and adding new loans.”

Still, Xiao cautioned the latest relaxation of funding guidelines, which is only valid through the end of the year, is designed to be targeted.

“China’s state banks will issue operating property loans to real estate companies on the basis of controllable risks and commercial sustainability,” Xiao said.

“Eligible property developers may then use these loans to repay existing loans of real estate companies and open market bonds they have issued,” he said.

China’s Ministry of Housing and Urban-Rural Development held a meeting Friday morning that emphasized again that local regions could adapt the newly release property policy guidelines as needed, according to official reports.

While not new, the meeting is among several this week — pointing to official efforts to speed up implementation of recent policy announcements.

Beijing’s stimulus announcement on Wednesday also marked a rare decision to release news at a press briefing, suggesting the Chinese government is signaling its intent at a time when the country’s stock markets are teetering on the edge of capitulation.

Such policy moves are typically only published online and disseminated via state media. But the People’s Bank of China Governor Pan Gongsheng announced the forthcoming reserve ratio requirement cut and real estate policy in person.

Last week, Chinese Premier Li Qiang announced the country’s annual GDP growth figure in his address at the World Economic Forum in Davos — a day before China’s National Bureau of Statistics was scheduled to release the country’s official GDP print and other data.

— CNBC’s Evelyn Cheng contributed to this story.

Homebuilder sentiment improved in January, jumping 7 points to 44 on the National Association of Home Builders monthly index. Anything below 50 is still considered negative, but the index has now moved 10 points higher in the last two months.

Sentiment is now at the highest level since September.

The increase coincides with a big drop in mortgage interest rates from around 8% in mid-October to the 6% range in December. Builders point squarely to that, and the effect on affordability, for growing confidence.

“Lower interest rates improved housing affordability conditions this past month, bringing some buyers back into the market after being sidelined in the fall by higher borrowing costs,” said Alicia Huey, NAHB chairman and a custom home builder and developer from Birmingham, Alabama. “Single-family starts are expected to grow in 2024, adding much needed inventory to the market. However, builders will face growing challenges with building material cost and availability, as well as lot supply.”

Of the index’s three components, current sales conditions increased 7 points to 48, sales expectations in the next six months jumped 12 points to 57 and buyer traffic rose 5 points to 29.

Regionally, on a three-month moving average, builder confidence increased the most in the Northeast, the only area now in positive territory at 55. Sentiment was flat in the Midwest and rose slightly in the South and West.

The state of the U.S. economy may be a chief concern among Americans, but 2023 wound up as a pretty good year for the macroenvironment.

Spending remained high, markets posted big gains and the Federal Reserve’s battle against inflation showed signs of cooling — without freezing. Then there’s the almost logic-defying resilience of the job market.

The U.S. labor market ended the year strong, creating more than 200,000 jobs in December, according to figures released Friday by the U.S. Bureau of Labor Statistics. While previous job creation estimates for October and November were revised downward by a combined 75,000, the unemployment rate remained at a low 3.7%, and December marked the 36th consecutive month of job creation for the U.S. economy.

In total, the U.S. created nearly 2.7 million jobs in 2023, when seasonally adjusted. That figure came despite concerns that the Federal Reserve’s ongoing fight against inflation through interest rate hikes might cool the labor market and put a chill on consumer spending.

Neither of those concerns came to fruition, however. In fact, consumer spending remained robust throughout the year, with monthly advanced retail sales staying above the $600 million mark for most of 2023, proving that despite many economic headwinds, U.S. consumers could not be deterred.

Here are nine other charts that show how the economy rounded out 2023.

While inflation continues to be top of mind for U.S. consumers, the rate of inflation cooled significantly in 2023. Meanwhile, wages rose throughout the year, eventually outpacing price increases.

U.S. consumers were in a mood to spend, particularly on experiences: 2023 was officially the year that travel rebounded, with the Thanksgiving holiday period breaking U.S. records. Nearly 150 million passengers were screened by the Transportation Security Administration across U.S. airports in November and December.

Americans spent on entertainment, too. With major hits such as “Barbie,” “Oppenheimer” and Taylor Swift’s The Eras Tour concert film, the U.S. box office came back in a big way last year from its Covid-19 pandemic lows.

Even assets such as crypto saw a rebound in 2023 after hitting a low in November of the previous year. Bitcoin prices ended the year at almost three times that previous low.

After its historic rate increases in 2022, the Federal Reserve tempered its war on inflation and only raised rates at four of its eight meetings in 2023. While the central bank’s target range for interest rates is the highest it has been since 2006, recent comments from Chair Jerome Powell have Fed watchers optimistic that rate cuts may be coming in 2024.

There were some trouble areas for consumers, however. Mortgage rates continue to be high. The average 30-year fixed rate in October was nearly triple what it was at the end of 2020 — although rates came down significantly by the end of the year — and existing home sales remain low, according to data from the National Association of Realtors. Until more housing inventory comes online, those issues are likely to persist into 2024.

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After a year full of record-high interest rates and home prices, experts say there are signs of improvement for the housing market in 2024.

In December, the average mortgage rates dropped below 7% for the first time since August and after an 8% peak in October, which pushed housing costs to the highest level since 2000.

The average rate on a 30-year fixed rate mortgage dropped to 6.95% from 7.03% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.31%. Meanwhile, the 15-year fixed rate mortgage jumped to 6.38% from 6.29%.

“The decline poses good news for buyers,” said Jessica Lautz, deputy chief and vice president of research at the National Association of Realtors. 

Interest and mortgage rates will slowly decline, giving people a “little bit more room in their budgets” when it comes to mortgage payments, experts say. Additionally, inventory is growing as new listings creep back up, said Nicole Bachaud, a senior economist at housing site Zillow.

Lower interest rates should come as encouraging news for homebuilders.

“It should be easier for builders as rates go down, as they need to borrow to build,” said Lautz. Homebuyers should see a greater supply as more homes will be built, she said.

However, consumers may still feel discouraged, added Lautz, as affordability may still be a challenge.

“We’re expecting home price appreciation to stay flat for the next year nationally, so prices aren’t really going to move much from where they’re at now,” Bachaud said.

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Homes were 52% more expensive than rentals this year, the highest gap on record, according to the Zumper Annual Rent Report for 2023.

High costs in the buying market have delayed homeownership for many buyers and kept inflation-strapped consumers in the rental market, some explained.

The national rent price for a one-bedroom apartment is $1,496, down 10% from a year ago. The last time there was a decline was during the pandemic, from July to October 2020, Zumper found.

“Over the course of the last few years, there were actually a lot of buildings in the rental sector, so that may have helped to alleviate rental prices. But they’re still at a high price point,” Lautz said.

Lautz expects more movement in the rental market next year as many young adults look for a place to live.

While most young adults either stayed with parents or paired up with roommates during the pandemic to relieve costs, they might seek independence next year, whether because “a CEO [is] saying you have to come back into the office or they’re ready to move out,” said Lautz.

New York City is seeing a surging demand for rental housing in commutable areas with easy access to downtown and midtown Manhattan in 2024, according to data from StreetEasy, Zillow Group’s New York City real estate marketplace. 

“That’s an indication that people are looking to move back closer to the workplace or closer to more amenities,” Bachaud said. “We’re expecting the rest of the country to follow that trend throughout the next year.”

Record-high interest rates deterred more than 69% of renters from buying a home in 2023, a Zumper report found. These high costs are pushing the typical ages of renters and first-time homeowners upward.

To that point, the typical head of household in a rental is 41 years old, up from age 40 in 2019 and age 37 in 2000, according to Zillow economist Bachaud.

“Renters are getting older,” said Bachaud. “As long as affordability remains a big challenge, we will likely see renters getting older.”

Meanwhile, the age of a typical first-time homebuyer is 35 years. In the 1980s, people bought their first homes at the age of 28, Lautz said.

Market conditions and external factors, such as student loan repayments and child care costs, are delaying homebuying activity for many shoppers, Lautz said.

Since many people cannot afford to buy a home, they are likely to consider renting a single-family home instead to achieve a similar experience.

While homeownership is challenging for many would-be buyers, it doesn’t mean people no longer aspire to own a home, said Bachaud.

“The American Dream is still owning a home,” she said. “There’s a lot of pent-up demand for ownership; that isn’t going to go away. It might take longer for people to get and to be able to realize that dream.”

Indeed, “homeownership is the number one way to build wealth in America,” said Lautz.

Lautz explained that when you look at the typical homeowner, they have a net worth of just under $400,000 compared with the typical renter, who has just over $10,000, following the American dream of financial stability.

“Folks will have to look elsewhere if they’re not looking at homeownership to find that,” Lautz added.

Additionally, younger generations are still thinking about saving for down payments and planning for future housing, said Bachaud, meaning the demand for homeownership persists.

She predicts a change in what homeownership will look like in the coming decades: “We’re kind of on that journey now.”

For now, serious first-time homebuyers should consider jumping into the market as soon as February, while the market remains quiet, said Lautz. Lower rates may breed competitive bidding wars among strong buyers, so now may be the time.

The National Association of Realtors forecasts mortgage interest rates will average 6.3% and estimates 0.9% increase for home prices in 2024, added Lautz.

“First-time buyers stand a chance at this time period,” she said. “It’s a trade off: Do they want to run the risk of encountering higher competition when rates are lower or do they want to increase the probability of securing homeownership?”

“Refinancing is always an option,” she said.